Hotel builder sued for $2.1M |

Hotel builder sued for $2.1M

With plans for a luxury hotel in Sun Peak stalled, a former Snyderville Basin landowner has sued the project’s developer for more than $2.1 million.

Residents in the subdivision west of S.R. 224 have attempted to block construction of a 275,000-square-foot hotel/condominium complex at the intersection of Bear Hollow Drive and Bear View Drive.

But Salt Lake attorney Bruce Baird recently filed a lawsuit against Summit County for the project’s developer, Chicago-based Terrace Development Partners. The Summit County Commission last spring denied a permit for construction of a hotel in Sun Peak with more than 300 rooms.

However, Terrace Development Partners is now the one getting sued.

The former owners of the hotel property, Newport Potomac Partners, sold the land to Mackinaw Realty on March 22, 2005, for $5.1 million, according to court papers filed by Newport Potomac June 5 against Terrace Development Partners.

"The [real estate purchase contract] required Mackinaw Realty to make an initial payment to Newport Potomac in the amount of [$3 million] leaving a balance due for the purchase of the property in the amount of [$2.1 million]," states a 9-page complaint filed on behalf of Newport by Joe Wrona, an attorney in Park City.

Mackinaw Realty agreed to pay the balance if the Summit County Commission allowed construction of a 140-unit hotel on the land, the complaint states.

Commissioners reportedly granted Newport Potomac preliminary approval for the project in 2001, which Mackinaw Realty was required to "diligently pursue," court papers state.

The $2.1 million balance could be reduced by $36,428 for each unit less than 140 approved by the County Commission, the lawsuit states, adding, "Mackinaw Realty subsequently assigned all its rights, obligations and interests pertaining to this transaction to Terrace Development."

Though the contract set a deadline of Nov. 23, 2005, for commissioners to approve the final plan, Wrona claims Terrace Development Partners verbally agreed to extend the period until the decision was made.

The County Commission was ready to vote in December when a Terrace Development Partners representative requested the action be delayed, the lawsuit states.

Terrace Development later refused to pay Newport Potomac the $2.1 million because the deadline for approval from the County Commission had passed, the complaint adds.

"Terrace Development prevented the [County Commission] from publicly announcing the approval in order to frustrate Newport Potomac’s right to the balance due under the [contract]," Wrona claims in the lawsuit.

Terrace Development breached the contract by submitting a plan "it knew would not be approved" to avoid paying Newport Potomac the balance, the complaint states.

"On Dec. 21, 2005, the [County Commission] was prepared to issue a decision approving the development of the property as a 140-unit condominium hotel," Wrona states in the complaint.

A representative for Terrace Development Partners was not available for comment for this story. The firm has not answered the lawsuit

Meanwhile, the lawsuit Terrace Development Partners filed against Summit County in April claims Summit County commissioners broke the law when they denied the application for a hotel with 326 rooms.

With Summit County Commissioners Ken Woolstenhulme and Bob Richer facing re-election bids in November, the complaint claims it is "clear that the [County Commission] reached its tortured interpretation of the record to serve politically motivated goals."

The lawsuit seeks approval for the hotel and more than $10 million in damages from Summit County in the property-rights dispute.

Summit County has not answered the lawsuit.

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